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WHEN: Today, Tuesday, November 7, 2017
Following is the unofficial transcript of an EXCLUSIVE CNBC INTERVIEW with ADP CEO Carlos Rodriguez and CNBC's Leslie Picker on CNBC's "Squawk on the Street" (M-F 9AM-11AM) today, Tuesday, November 7th. Following are links to the video on CNBC.com: https://www.cnbc.com/video/2017/11/07/adp-ceo-we-hope-vote-sent-ackman-and-activists-a-message.html, https://www.cnbc.com/video/2017/11/07/adp-ceo-shareholder-vote-signals-resounding-support-for-our-board.html.
All references must be sourced to CNBC.
CARL QUINTANILLA: ADP SHAREHOLDERS HAVE RE-ELECTED ALL TEN OF THE COMPANY'S DIRECTORS. THAT IS A LOSS FOR BILL ACKMAN WHO HAD SOUGHT THREE OF THOSE SEATS. LESLIE PICKER IS AT ADP HQ, WITH CEO CARLOS RODRIGUEZ. HEY, LESLIE.
LESLIE PICKER: HEY, CARL, THAT'S RIGHT. I'M CURIOUS TO HEAR FROM YOU, CARLOS. WHAT DO YOU THINK THE MESSAGE THE SHAREHOLDER SENT TO YOU TODAY IS?
CARLOS RODRIGUEZ: WELL, IT FELT LIKE A RESOUNDING SUPPORT FOR OUR BOARD, FOR OUR TEN CANDIDATES SO WE'RE VERY HAPPY. IT FEELS LIKE A BIG VICTORY AND I THINK A BIG MANDATE FOR US TO CONTINUE ON THE PATH WE'RE ON WITH THE STRATEGY WE HAVE.
PICKER: CONTINUE ON THE PATH YOU'RE ON. OBVIOUSLY, THIS HAS BEEN A THREE-MONTH PROCESS. ACKMAN ISSUED 168-PAGE PRESENTATION DETAILING DIFFERENT THINGS HE WOULD RECOMMEND. IS THERE ANYTHING YOU TAKE FROM THAT PLAN MOVING FORWARD WITHOUT HIS POSITION ON THE BOARD?
RODRIGUEZ: WELL, AS I SAID MULTIPLE TIMES, I THINK A LOT OF THINGS BILL RAISED IN HIS PRESENTATION OVER THE LAST THREE MONTHS ARE THINGS THE COMPANY WAS ALREADY WORKING ON, SO THERE'S REALLY NOT A LOT OF DEBATE ABOUT THE THEMES HE'S BROUGHT UP. THE DEBATE'S REALLY BEEN ABOUT PACE AND ABOUT RISK MANAGEMENT. SO I WOULD SAY WE LEARN A LOT OF NEW THINGS AS A RESULT OF BILL'S PRESENTATION, AND ALSO HIS ONGOING COMMENTS. BUT THERE'S REALLY NO DISPUTE ABOUT I THINK THE COMPANYS PATH IN TERMS OF WHAT IT NEEDS TO DO.
PICKER: AND A SPECIFIC STRATEGY WAS LAID OUT DURING THE PROCESS IN COMMUNICATING THE SHAREHOLDERS AND PROXY ADVISORY FIRMS IN TERMS OF INCREASING MARGINS BY 500 BASIS POINTS AND THE VARIOUS POINTS THAT WERE LAID OUT ON THAT END. DO YOU THINK THE PROXY CONTEST ITSELF INFLUENCED THOSE NEW STRATEGIES MOVING FORWARD OR WAS THAT SOMETHING THAT WAS ALREADY SET IN MOTION AS WELL?
RODRIGUEZ: WELL, YES, THAT WAS ALREADY SET IN MOTION. I THINK WE'VE SAID THAT A NUMBER OF
TIMES. SPECIFICALLY THE MARGIN IMPROVEMENT NUMBERS THAT WE PUT OUT
THERE. WE HAVE, LIKE, A LOT OF COMPANIES OUR OWN LONG TERM STRATEGIC PLAN AND THAT HAS NUMBERS ATTACHED TO IT. SO REALLY WHAT WE DID, WE JUST PROVIDED LONGER TERM GUIDANCE TO OUR SHAREHOLDERS, BUT THAT'S A STRATEGY AND PLAN WE ALREADY HAD IN PLACE AND THAT THE BOARD ALREADY APPROVED.
PICKER: MY COLLEAGUE JIM CRAMER HAS A QUESTION BACK AT THE NEW YORK STOCK EXCHANGE.
RODRIGUEZ: HI JIM.
JIM CRAMER: YES, CARLOS, CONGRATULATIONS ON YOUR WIN. I WANTED TO KNOW IF BILL ACKMAN HADN'T CHOSEN A KIND OF GENERAL SHERMAN MARCH TO SEA STRATEGY, WHERE IT BASICALLY WANTED TO SCORCH EARTH, WOULD IT HAVE HELPED THE DIALOGUE? WOULD YOU HAVE MAY EVEN SAID, "LISTEN, WE WANT TO HEAR WHAT YOU WANT TO SAY. COME BACK A YEAR FROM NOW." BUT HE DID KIND OF LEAVE ATLANTA BURNING.
RODRIGUEZ: I DON'T THINK THAT THE APPROACH REALLY HAD ANYTHING TO DO WITH IT JIM. I DON'T THINK IT WOULD HAVE MADE A DIFFERENCE IT MAY HAVE BEEN MORE CORDIAL AND PROFESSIONAL IN TERMS OF THE APPROACH BUT I DON'T THINK IT WOULD HAVE MADE ANY DIFFERENCE AT ALL. WE LISTENED TO BILL AND ALL SHAREHOLDERS AND WE'LL CONTINUE= TO DO THAT INTO THE FUTURE.
CRAMER: WELL, WILL YOU FOLLOW-UP ON ANYTHING THAT HE SUGGESTED? HE HAS ISSUES ABOUT THE NUMBER OF EMPLOYEES VERSUS REVENUE AND SAYS YOU HAVE WAY TOO MANY BUILDINGS AND THAT IT WOULD BE EASIER TO CONSOLIDATE. ANY OF THOSE THINGS RING TRUE?
RODRIGUEZ: WELL, I THINK AS I MENTIONED TO YOU, JIM, BEFORE, THE CONSOLIDATION OF OUR FACILITIES AND BUILDINGS IS SOMETHING WE HAD UNDER WAY FOR 18 MONTHS, SO THAT REALLY WASN'T A NEW IDEA. AND THE QUESTION OF REVENUE FOR EMPLOYEES, USING THE RAW NUMBERS AND YOU AND I HAVE HAD THAT DIALOGUE.
CRAMER: VERY TRUE THANK YOU. DAVID?
DAVID FABER: SURE, I'LL ASK A QUESTION. CARLOS, WAS THIS JUST A WASTE OF YOUR TIME?
RODRIGUEZ: WELL, I WOULD SAY THAT THE LAST THREE OR FOUR MONTHS WE HAVE DESCRIBED IT HAS BEEN HIGHLY DISTRACTING AND PROBABLY NOT A GREAT USE OF TIME FOR A SMALL GROUP OF PEOPLE. BUT FOR THE OTHER 58,000 HARD WORKING ASSOCIATES ADP THAT HAS AROUND THE WORLD, IT REALLY DIDN'T THROW THEM OFF THEIR GAME. YOU SAW PERFORMANCE THAT WE HAD IN THE FIRST QUARTER AND I THINK WE CONTINUE TO MARCH AHEAD SERVING OUR CLIENTS AND I THINK DELIVERING GREAT RESULTS TO OUR SHAREHOLDER AS WELL.
FABER: MR. ACKMAN HAS SAID HE'LL REMAIN A SHAREHOLDER, HE IS A SIGNIFICANT SHAREHOLDER BUT I'VE ALWAYS BEEN CURIOUS ABOUT HIS UNWILLINGNESS OR INABILITY TO CONVERT TO A FULL 8.3% POSITION BUT STILL OWNS WHAT, 2%. WILL YOU CONTINUE TO ENGAGE WITH HIM? IF HE GIVES YOU A CALL, WILL YOU TAKE IT?
RODRIGUEZ: OF COURSE, WE ENGAGE WITH ALL OF OUR SHAREHOLDERS ON A REGULAR BASIS. WE HAD A LOT MORE ENGAGEMENT THAN WE TYPICALLY HAVE IN A SHORT PERIOD OF TIME BUT WE'RE -- WE HAVE AN ONGOING DIALOGUE WITH OUR SHAREHOLDERS ARE WE'RE CONSTANTLY LISTENING TO THEM. AND I THINK BILL WOULD BE ONE OF THOSE SHAREHOLDERS THAT WE'D LISTEN TO.
QUINTANILLA: GIVEN YOUR ANSWER TO DAVID'S QUESTION JUST NOW, DOES IT CHANGE THE WAY YOU THINK YOU'LL APPROACH THESE TYPES OF SITUATIONS FROM ACTIVISTS IN FUTURE, WHETHER IT'S ACKMAN OR NOT?
RODRIGUEZ: WE HOPE TO NOT FACE THESE TYPES OF SITUATIONS AGAIN IN THE FUTURE, BECAUSE AS YOU CAN SEE, THE SHAREHOLDERS ARE FIRMLY BEHIND THE COMPANY. WE HAVE A LONG TERM ORIENTED SHAREHOLDER BASE THAT IS VERY SUPPORTIVE OF THE BOARD, VERY SUPPORTIVE OF THE STRATEGY, SO WE WOULD HOPE THAT THIS IS A MESSAGE NOT JUST TO BIG BILL ACKMAN BUT TO ALL ACTIVISTS, THAT ADP IS ON A STRONG FOUNDATION AND ON THE RIGHT PATH. AND YOU KNOW, THE COUNTRY HAS A LONG TRADITION IN ECONOMICS AND IN POLITICS OF RESPECTING A VOTE. AND I HOPE THAT BILL AND EVERYONE ELSE WILL DO THAT IN THIS CASE AND MOVE ON AND LET US MOVE ON WITH OUR BUSINESS.
PICKER: NOW, BILL ACKMAN SAID YESTERDAY ON CNBC THAT EVEN IF HE DOES NOT WIN TODAY'S ELECTION, WHICH NOW WE KNOW THE RESULTS, THAT HE COULD COME BACK IN A YEAR AND LAUNCH ANOTHER PROXY FIGHT IF THERE ARE ANY MISSTEPS ALONG THE WAY. DOES THAT CONCERN YOU AT ALL?
RODRIGUEZ: WELL, I HOPE THAT HE – I HOPE AGAIN, THAT HE MOVES ON. I THINK THAT THE – IT WAS CLEARLY A VERY RESOUNDING VICTORY FOR THE BOARD – FOR OUR BOARD AND FOR OUR COMPANY. I THINK IT'S THE LARGEST MARGIN OF VICTORY OF ANY LARGE CAP PROXY CONTEST EVER. AND SO I THINK THAT WOULD HOPEFULLY BE A MESSAGE THAT IT'S TIME TO MOVE ON. I THINK THAT THE PENSION PLANS AND OTHER INVESTORS THAT PUT MONEY INTO HIS FUND AND CHARGE HIM – AND PAY THE EXORBITANT FEES HE CHARGES AND GIVE UP 30% OF THE UPSIDE WILL BE WELL SERVED TO REALLY DELIVER A MESSAGE THAT HE SHOULD MOVE ON AND FOCUS ON SOMETHING ELSE.
PICKER: ALL RIGHT, CARLOS RODRIGUEZ, CEO OF ADP COMING OFF THE VICTORY IN THE PROXY FIGHT AGAINST BILL ACKMAN. THANK YOU SO MUCH FOR JOINING US.
PICKER: BACK OVER TO YOU GUYS.
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